The March quarter consumer price index (CPI) data, released today by the Australian Bureau of Statistics (ABS), revealed a continued moderation of rental growth at the national capital city level.
According to the ABS, rents nationally grew by 0.8% in the March quarter of 2013, which was the equal lowest rate of quarterly rental growth recorded since June 2006 (the prior two quarters also recorded 0.8% rental growth):
On an annual basis, rental growth nationally slowed to 3.5% in the latest quarter, which was the slowest rate of rental growth since the September quarter of 2006:
The relief of slowing rents may be short lived, however, with population growth picking-up significantly over the past year which, based on recent experience, suggests that rents may soon be on the rise (see next chart).
That said, while increasing population growth, other things equal, implies rising rents, the impact could be mitigated by any worsening of domestic economic conditions, or a significant supply response in the event that the RBA achieves its goal of housing construction filling the void left as the mining investment boom unwinds.
